Glimmer of hope for bulls

WEEKLY TECHNICAL ANALYSIS

The Sensex continued to drift lower for the fifth straight week and, in the process, shed 14.5 per cent (2,109 points) during the period. The index had posted weekly gains during the week ended February 9, when the Sensex hit its peak at 14,724 and ended at 14,539.

Last week, the Sensex started on a positive note and went on to log gains on three of the five trading sessions. But the upward move lacked conviction and the index could not hold gains and instead ended the week with a significant loss of 455 points at 12,430.

From a high of 13,057, the Sensex slipped to a low of 12,316 "" an intra-week fall of 741 points "" as the markets continued to face intense selling pressure at higher levels. The Nifty rallied to a high of 3,781 early in the week and then dropped to a low of 3,574 "" down 208 points from the high. The index ended with a loss of 109 points at 3,609. Last week, we said the Sensex is likely to drift to the 11,800-level and we continue to maintain our view. Overall, the market continues to remain on a weak ground. But there is a small silver lining for the bulls.

The Sensex, so far, has held the S1 (support 1) level on a monthly basis, which is at 12,200. If the index continues to hold the support level and moves above 12,940, then one may see a strong move up to the 13,800 level.

On a weekly basis, the Sensex is likely to face resistance around 12,715-12,800-12,890. The index may find support around 12,150-12,060-11,970.

On the other hand, the Nifty may face resistance around 3,690-3,710-3,740, while in the case of a downward movement, the index may find support around 3,530-3,505-3,480.